Hello everyone, and welcome to the new software update from TrendSpider. In this release, we introduce two new demo indicators: the Wick Oscillator and the Pressure and Response Indicator. Details after the jump.
In this update, we release two new correlated beta indicators designed to identify potential market changes and trends. These indicators are based purely on price action and do not incorporate any other data (such as volume) into their calculations.
Filament oscillator (experimental)
Wick Oscillator is a new experimental indicator developed by TrendSpider engineering team. It is displayed as a bottom indicator at the bottom of your chart.
This indicator is designed to measure the relative size of the wicks on each candle in an effort to determine potential market pressure to reverse trends from price action alone. It consists of three separate stripes and two color shading. This indicator works differently on charts using Raindrop candles versus traditional candles.
In traditional candlestick charts, the upper line in the Wick Oscillator calculates the difference between the open or close (whichever is higher) and the height. The bottom line calculates the difference between the open or close (whichever is lower) and the bottom. These numbers are then displayed through a graduated window (the default value is 5) and used to calculate the Wick Oscillator. The last line, the white line, is identical to the difference between the upper and lower wick, and is drawn in the middle of the chart.
When the Wick Oscillator shows a larger range in the upper half of the oscillator versus the lower half, selling pressure is implied. This is because the wicks at the top of each candle are larger than the wicks at the bottom of each candle. When the opposite is true, the wicks in the lower half are larger than the wicks in the upper half, this indicates the possibility of an upward reversal. The white line can be used as a confirmation of this information, for example when the white line favors the lower part of the indicator, it can mean confirmation and the same in the opposite direction.
When using the Wick Oscillator on the Raindrop chart, the calculation is done a little differently. Instead of measuring the distance between close or open and between the highest or the lowest, it will measure the difference between the highest or lowest and the central VWAP on the chart. This provides a different set of signals that we think are most useful for trading.
pressure/response (beta)
The Pressure and Response Indicator (P/R for short) is very similar to the Wick Oscillator in that it also measures price movement by calculating the difference between the highest or lowest and the open or close. This indicator also works differently on Raindrop charts in the same way as the Wick Oscillator.
When you open this indicator’s properties, you’ll see inputs for MA Type / MA Length, we find “wildma” particularly interesting when paired with Raindrop charts but you can choose a range of configurations to suit your specific needs.
*Note we find that the pressure release indicator is more correlated with lower-length MA values*
In the example below for $IBM with Raindrop charts for the daily period, you can see that on December 7, 2021 the pressure component flipped as shown by the green and red bars in the middle of the oscillator from red to green. This indicates a shift in momentum as the deep dip wicks begin to soften and the bottom begins to develop.
From this momentum breakout, you can see the $IBM trail price hit a new local high over the coming months.
This type of movement lends importance to the second component of this oscillator, the response line. The response line aims to illustrate the extremes in momentum that it represents as a moving average between -1 and +1. +1 will be the peak of the momentum of the bullish wave, and the opposite for negative values.
Please note that both of these indicators are completely new and not found on other platforms and are considered beta by the TrendSpider team. Happy trading!